Home' Grower : Dec 2013 - Jan 2014 Contents 14 The South Australian Grower -- December 2013/January 2014
needs a global brand
AUSTRALIA is falling behind
as a global brand and this is
having severe consequences for
agribusiness and other domestic producers.
But across the Tasman, New Zealand
is seen as a model example of national
branding, having created both an export
strategy and international relationships
which Australia 'just hasn't been able to
Australia should take a leaf out of
New Zealand's book when it comes to
global branding, or risk losing ground on
agricultural exports. Its '100% Pure New
Zealand' brand campaign, which has been
running since 1999, is a clear success story
and has 14 years' head start on Australia.
There is no doubt that New Zealand's
national brand is firmly cemented in the
minds of global buyers and promotes its
'pure' and 'quality' image.
Additionally, Australian agribusinesses
have failed to build long-term relationships
in Asia, and need to start bidding for
control of food value chains throughout
the region. For some peculiar reason, we
have ignored Asia's potential, and have the
arrogance to assume that we can 'sit on
the verandah' and wait for Asia to come to
us; this is certainly not going to work. We
think we have demonstrated how big we
are in Asian markets but in reality we are
only a snack to this part of the world. We
have simply not got on the ground there.
At a recent Australian Farm Institute
roundtable conference in Sydney, UTS
Business School branding expert and
adjunct Prof Craig Davis said Australian
businesses were seen to be resentful of
making business trips to Asia and viewed
as short-term 'wheeler dealers' rather than
As Australian agriculture evolves
from being a low-cost supplier of bulk
commodities to global markets into
a supplier of both bulk commodities
and more specialised and differentiated
products to higher-value markets,
particularly in Asia, the interaction
between producers and the value chain
post-farm gate will become an increasingly
important element of farm business
viability. Producers must understand
what the end-customer wants in terms of
product and provenance, and this is where
relationship building is critical.
The Canadian beef industry has been
building a relationship in China for many,
many years and it is not just about meat
but also about genetics and production
technologies. New Zealand-owned Fonterra
has been deeply involved in China for a
number of years and it is the relationship
which has served the dairy giant well
through recent tumultuous times.
Ian Glasson, chief executive officer
at Singapore-based Zuellig Group,
which has agribusiness interests in
the Asia-Pacific region, also spoke at
the conference and said Australian
agribusinesses needed to set up
partnerships with investors in Asian
countries to distribute Australian product,
or risk losing ground to competitors.
Australia must play in the whole global
value chain, particularly because it is very
small in terms of global food supply and
perhaps has the capacity to supply just
two per cent of Asia's food demand (and
this is into niche markets). It is also not
just about the product. There are plenty
of countries espousing 'clean and green'
and we can add to this by co-packaging
our globally benchmarked agricultural
management expertise and technological
skills. This can be our point of difference.
Australia needs an export plan for the
food sector in which it develops a much
more coherent and consistent story about
why Australian produce is better than
anything else on earth.
Details: firstname.lastname@example.org or 08 8425
A Chinese ship at Port of Oakland, California, US, one of the world's busiest container ports.
Australia must play in the whole global value chain, particularly because it is very small in
terms of global food supply and only has the capacity to supply 2pc of Asia's food demand,
that too to niche markets.
Australia needs a much
more coherent and
consistent story about why
its produce is better than
anything else on earth.
Food industry holding, not falling inface of challenges
By COLIN BETTLES
LATEST statistics depict a "resilient" food, beverage
and grocery industry and not one that's in "steep,
terminal decline", according to Australian Food
and Grocery Council chief executive officer Gary
In its fifth and most recent State of the Industry
report, the council has updated historical statistical
information on various industry sectors. The new
figures show those combined sectors had $111.2
billion in total turnover for the 2011-12 financial
year, up from $110.7b the year before.
Food and beverage processing contributed
$88.7b, grocery $16.9b and fresh produce $5.5b to
this year's total turnover.
The inflation-adjusted value of industry turnover
contracted by 0.3 per cent in 2011-12 compared
to 4.5pc last year while industry employment also
decreased marginally by 1071 (0.4pc) from the
previous financial year.
The industry employed about 298,825 people in
2012-13, comprising 222,000 in food and beverage
manufacturing; 30,744 in grocery manufacturing;
and 46,081 in the fresh produce sector.
Last year's council report showed total industry
employment had contracted 2.2pc, which prompted
chairman John Doumani to say the figures should
sound "alarm bells" for policy makers at federal,
state and local levels, given that about half the
people were employed directly in rural and regional
But speaking to Fairfax Agricultural Media,
Mr Dawson said this year's industry figures
contradicted some of the more sensational
headlines around the nation about the state of
food manufacturing and processing, amid recent
high-profile plant closures.
He said "holding a line" on this year's
employment figures was a positive result, given the
industry had faced some "incredible challenges".
"The picture is one of a resilient industry, not one
in terminal decline," he said.
The report said turnover and employment
continued to contract this year, "albeit at a slower
rate", but the industry's trade performance showed
a "strong improvement and capital expenditure
"Overall, the industry appears cautiously
optimistic about its future," the report said.
Mr Dawson said the figures on capital expenditure
spending showed businesses were prepared to
invest in the food and grocery industry to improve
The report showed that capital investment
in food product manufacturing had increased
"significantly", by 26.5 per cent, "as organisations
increased investment in productivity initiatives such
as automation and other cost reduction programs".
Mr Dawson said another encouraging sign was
the performance of industry exports. According to
the report, exports of food and beverages increased
from $18.2b to $18.8b (3.4pc) and fresh produce
increased from $651.6 million to $821.8m (26.1pc).
But grocery exports decreased by from $4.9b to
At the same time, the value of industry imports
decreased by 0.4pc to $26.5b in 2012-13.
"It's not spectacular growth but a sign that trade
has stabilised and is growing again," Mr Dawson
"The export of value-added, premium priced
foods into growing markets, the Asian region in
particular, are opportunities worth going after."
But he said concerted efforts were needed to
reduce regulatory, energy and labor costs.
The report said rising commodity prices, rising
energy and labour costs, continued downward
pressure on margins from a highly competitive
retail sector, coupled with relatively subdued
consumer confidence were "combining to produce
a challenging business environment".
Council chairman Terry O'Brien also upped the
ante in applying pressure on the government to
reduce cost burdens.
"Looking ahead, a confidence boost from a
change in government along with reductions in
energy costs (if the carbon tax is abolished) should
help stimulate growth," he wrote in the chairman's
"The new federal government has emphasised
a return to certainty and stability, and a focus on
getting the policy settings right to boost confidence
and promote investment and jobs. The food
and grocery sector is greatly encouraged by an
emphasis on removing regulation and red tape and
encouraging manufacturing industry to continue to
drive economic growth."
In his report, Mr Dawson wrote: "The Coalition
has been elected on a mandate to put in place
policies that will modernise the Australian economy
and enhance the productivity and competitiveness
of the manufacturing sector".
"The Government's Commission of Audit of
public expenditure, "root and branch" review of
competition policy, the Energy White Paper, Review
of Taxation and extensive institutional changes
within the bureaucracy to reenergize regulatory
reform will have a significant long term influence
on economic conditions," he said.
Australian Food and Grocery Council CEO
Gary Dawson says this year's industry
figures contradicted some of the more
sensational headlines around the nation
about the state of food manufacturing
and processing amid recent high-profile
plant closures, saying the "picture is one
of a resilient industry, not one in terminal
Trade performance up
Food investments grow
Export signs encouraging
By ROBBIE DAVIS
CEO, Potatoes South
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